US sues Deutsche Bank for tax avoidance
The US government sued Deutsche Bank Monday for creating shell companies that allowed it to avoid paying tens of millions of dollars in taxes.
The suit filed by the US attorney in New York asks for $190 million in back taxes and penalties for an operation it alleged was made expressly to avoid taxes on a $100 million gain in the sale of stock.
The government said the bank set up three shell companies in 1999-2000 with the purpose of executing “a series of pre-planned transactions” meant to eliminate the tax liabilities on the sale of the stock.
“These shell corporations collectively served as an underfunded special-purpose vehicle with no function other than to be stuck with a tax bill that it could never pay,” the Manhattan US attorney, Preet Bharara, said in a statement.
“This was nothing more than a shell game,” he said.
The Internal Revenue Service determined that the total tax liability, plus penalties and interest, is more than $190 million.
